P S FALCONER & ANOR V SOUTHERN CROSS BUILDING SOCIETY HC AK CIV 2009-404-001418

P S FALCONER & ANOR V SOUTHERN CROSS BUILDING SOCIETY HC AK CIV 2009-404-001418 19 August 2009IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY CIV 2009-404-001418UNDER the District Courts Act 1947 IN THE MATTER OF an appeal against a decision of the District Court at Auckland BETWEEN PETER STUART FALCONER AND JENNIFER JANE FALCONER Appellants AND SOUTHERN CROSS BUILDING SOCIETY Respondent Hearing: 9 July 2009 Appearances: D M Connor for the Appellants G J Kohler for the Respondent Judgment: 19 August 2009 at 4:00pmJUDGMENT OF WYLIE JThis judgment was delivered by Justice Wylie on 19 August 2009 at 4:00pm pursuant to r 11.5 of the High Court Rules Registrar/Deputy Registrar Date: Solicitors/Counsel: Simpson Western, Private Bag 93 533, Takapuna, North Shore 0740 D O'Connor, P O Box 3897, Shortland Street, Auckland 1140[1] Mr and Mrs Falconer ("the Falconers") appeal against a decision given by Judge P A Cunningham in the District Court at Auckland on 13 February 2009. The Judge struck out the Falconers' statement of claim against the Southern Cross Building Society ("Southern Cross"). The Falconers say that she was wrong to do so. They assert that their statement of claim against Southern Cross discloses reasonable causes of action, that there was no estoppel preventing the proceeding, that they had not been guilty of inordinate delay, and that there was in any event no prejudice to Southern Cross.Background[2] The matters in issue in these proceedings have been outstanding for a long time. [3] In March 1993, the Falconers granted a mortgage to Southern Cross over a property owned by them and situated in Norden Place, Remuera. The mortgage secured an advance of $382,150. The mortgage was for a two year term. [4] On 3 October 1995 the mortgage was varied. Its term was extended for a further two years to 25 March 1997. [5] The Falconers did not repay the loan secured by the mortgage on 25 March 1997. Rather they reduced the secured amount by $50,000 in October 1997, and requested that the mortgage should be extended for a further two years. [6] On 28 November 1997, Southern Cross wrote to the Falconers advising that it had extended the "loan for a further twenty four months from 25 March 1998". The Falconers signed the letter and returned it to Southern Cross. Although the letter suggested that a variation of mortgage would be executed, in the event this did not happen. Southern Cross says that the date was in error and the letter should have read that the loan was extended for 24 months from 25 March 1997. At the hearing before me the Falconers through Mr Connor appearing on their behalf accepted that the letter probably did contain a mistake, but submitted that they were nevertheless entitled to rely upon the date stated by Southern Cross.[7] The Falconers defaulted on their obligations under the mortgage on various occasions as from January 1997. They did not regularly pay instalments of interest and principal as required. Various payments made were dishonoured. Southern Cross had to pay the rates on the property. The Falconers did not repay the principal sum which Southern Cross says fell due on 25 March 1999. [8] On 4 November 1999, Southern Cross issued a Property Law Act notice ("the notice"). It asserted that the Falconers had failed to repay the principal sum due and owing on 25 March 1999. It sought repayment of the principal sum together with accrued interest of $51,474.51. The default was required to be remedied by 16 December 1999. [9] The Falconers did not remedy the default. Rather in April 2000, they sought to stop the pending mortgagee sale. They filed an injunction in this Court under matter number CP 159/SW/IN/2000. No statement of claim was filed, but the ex parte notice of application recorded that one of the grounds on which the interim injunction was sought was that Southern Cross had agreed to extend the time for repayment of the mortgage to 25 March 2000, but by the notice dated 4 November 1999, purported to call up the principal sum as at 25 March 1999. The injunction sought to restrain Southern Cross from selling the property until further order of the Court. [10] In the event, there were negotiations between the parties and Southern Cross agreed to postpone the mortgagee sale. The settlement was recorded in correspondence between the parties' respective solicitors and in a letter signed by the Falconers and forwarded to Southern Cross's solicitors dated 27 April 2000. The Falconers undertook that if they could not refinance the mortgage in full by 9 May 2000, that the mortgagee sale could proceed without interference. [11] On 1 May 2000, a notice of discontinuance was filed by the Falconers in proceedings CP 159/SW/IN/2000. [12] The Falconers were unable to refinance and the mortgagee sale proceeded on 10 May 2000.[13] On 3 November 2005, some five and a half years later, and one day before the limitation period in respect of the notice expired, the Falconers issued the proceedings now in issue in the District Court. Inter alia the statement of claim alleges that the principal sum outstanding under the mortgage was not due for repayment on 25 March 1999 as the term of the loan had been extended to 25 March 2000. [14] Almost a year later, on 26 October 2006, the proceedings were served on Southern Cross. [15] The proceedings were case managed by the District Court. A timetable was put in place by consent on 17 April 2007. The Falconers breached that timetable by failing to provide their list of documents within the required timeframe. On 31 July 2007 Southern Cross sought a fixture. The Falconers wished to have the setting down date deferred. On 16 October 2007 the parties were asked if they would accept a back up fixture on 17 December 2007. The Falconers declined to take a back up fixture and instead requested a firm fixture. On 5 December 2007 the proceedings were allocated a firm fixture on 31 March 2008. The standard pre-trial directions were imposed. The Falconers' evidence was required to be served on Southern Cross in early January 2008. The Falconers did not serve their evidence. On 12 February 2008 and again on 20 February 2008, counsel for Southern Cross wrote to the Falconers' solicitor requesting their evidence. In the later letter, Southern Cross's counsel expressly asked whether the Falconers were intending to proceed with their claim. No response was received by Southern Cross to either of these letters. [16] A teleconference was scheduled for 11 March 2008. On 10 March 2008, the Falconers filed a memorandum. They acknowledged that they had failed to comply with the timetable directions. They stated that they had been unable to fund the cost of instructing their solicitors to prepare the necessary briefs of evidence. They advised that they did not expect to be in a position to do so for the next two months and they sought that the fixture should be vacated. They sought that the proceedings should be adjourned for a period of three months and that a teleconference should then be convened to review matters.[17] I was advised from the bar that during the course of the teleconference held on 11 March 2008, Mr Kohler for Southern Cross indicated that his client would be seeking to strike out the proceedings for delay. [18] The fixture had to be vacated because the Falconers had not served their evidence. On 12 March 2008, Judge Joyce QC issued a Minute vacating the fixture and putting in place a timetable for dealing with Southern Cross's strike out application. [19] On 18 March 2008, Southern Cross applied to stay or dismiss the proceedings, and in the alternative sought security for costs. A notice of opposition was filed by the Falconers, and the applications came on for hearing before Judge Cunningham.District Court decision[20] Judge Cunningham reviewed the statement of claim, and the causes of action raised by the Falconers. She reviewed the application by Southern Cross to stay or or dismiss the proceedings. She referred to the affidavit evidence which had been filed. She then reviewed the Falconers' position, and proceeded to address the legal issues. [21] The Judge asked herself first whether or not the Falconers' statement of claim disclosed had reasonable causes of action. She referred to the relevant legal principles, and then considered each of the three causes action separately. She dealt with the first cause of action – namely breach of contract and the defective notice. She considered that Southern Cross had a sound argument that the mortgage expired on 25 March 1999, and that therefore it was able to make demand because the Falconers had failed to repay the principal sum. She noted Southern Cross's argument that the Falconers had raised the validity of the mortgagee sale and the notice in the earlier High Court proceedings. She took the view that the Falconers had settled those proceedings in full in April/May 2000. She considered that any defects in the notice were subject to an accord and satisfaction, that the notice did not misstate the expiry date of the mortgage, that there was no misstatement of theamount of interest due, and that even if there was, it was not so over-stated as to make the notice invalid. She concluded that there was no reasonable cause of action in relation to the alleged breach of contract and defective notice. [22] Her Honour then dealt with the second cause of action – namely an allegation that Southern Cross breached its duty to obtain the best possible price for the property at the mortgagee sale. The Judge concluded that prospects of the Falconers succeeding in this cause of action were extremely unlikely. [23] The third cause of action alleged unlawful interference with business. The Judge reviewed this cause of action and again concluded that the likelihood that the Falconers would succeed was low, although not impossible. [24] The Judge then considered the way in which the proceedings had been conducted. She reviewed the facts, and the relevant authorities, and concluded that the delay on the part of the Falconers was inordinate. She considered the Court's powers under r 482 of the District Courts Rules, and noted that the Court should not dismiss proceedings under that rule unless the delay was such as to give rise to a substantial risk that it was not possible to have a fair trial. She reviewed the evidence advanced by Southern Cross through a Mr Ockenden, and concluded that a fair trial was prejudiced because: a) the real estate agent's file is no longer in existence; b) the agent who dealt with the mortgagee sale is no longer employed by the real estate agents; c) the solicitor who dealt with the file for Southern Cross is no longer working for the firm that dealt with the matter; d) the employee of Southern Cross who dealt with the matter ceased employment with Southern Cross some years ago; e) in relation to one of the causes of action (which alleges that Southern Cross gave incorrect advice to Sovereign Insurance sometime beforeMay 2000), there was no disclosure and no contact had been made with Sovereign Assurance to ascertain the availability of witnesses; and f) memories would necessarily have dimmed. [25] Her Honour concluded that the pre-issue delay, the delay in serving the proceedings, and the events that caused the fixture of 31 March 2008 to be abandoned constituted inordinate delay by the Falconers, and that this had caused serious prejudice to Southern Cross. Taking all of those matters into account, she exercised her discretion to strike out the Falconers' statement of claim.The nature of the appeal[26] The Falconers' notice of appeal is dated 13 March 2009. The appeal is brought under s 72 of the District Courts Act 1947. Pursuant to s 75, all appeals under s 72 must be by way of re-hearing. Section 76 governs the powers of the High Court on appeal. The High Court's powers were expanded by the District Courts Amendment Act 2002 to include "mak[ing] any decision it thinks ought to have been made". This formulation invites the High Court to substitute what it considers is the right answer rather than to determine solely whether there was a sufficient basis for the District Court's decision. [27] Mr Kohler appearing for Southern Cross suggested that in order to succeed on the appeal, the Falconers have to establish that the District Court Judge acted on a wrong principle, failed to take into account some relevant matters, took into account some irrelevant matters, or was plainly wrong. He referred me to a number of authorities in this regarding including May v May (1982) 1 NZLFR 165, and Harris v McIntosh [2001] 3 NZLR 721. [28] The position reflected in those authorities has been affected by the recent observations of the Supreme Court in Austin, Nichols & Co Inc v Stichting Lodestar[2008] 2 NZLR 141. An appellate Court hearing an appeal by way of re-hearing should carry out its own assessment of the facts and should not hesitate to substituteits own findings of fact. An appellate Court must apply an independent judgment to the conclusions reached by the Court of first instance. [29] The current position is summed in the judgment of Elias CJ at [16] which reads as follows:Those exercising general rights of appeal are entitled to judgment in accordance with the opinion of the appellate court, even where that opinion is an assessment of fact and degree and entails a value judgment. If the appellate court's opinion is different from the conclusion of the tribunal appealed from, then the decision under appeal is wrong in the only sense that matters, even if it was a conclusion on which minds might reasonably differ. In such circumstances it is an error for the High Court to defer to the lower Court's assessment of the acceptability and weight to be accorded to the evidence, rather than forming its own opinion.[30] I note however that Austin, Nichols & Co Inc makes it clear that the onus is still on the appellant to show that the trial Judge was wrong – see Austin, Nicholas & Co Inc at [4]. [31] I am aware that recently the Court of Appeal has indicated the Austin, Nicholas & Co Inc approach does not apply to appeals from the exercise of a discretion – see Blackstone v Blackstone (2008) 19 PRNZ 40. [32] I propose to adopt the approach that some reasonably plain ground should be made out before intervening with Judge Cunningham's decision, while recognising, consistently with Austin, Nichols & Co Inc, that this Court should form its own opinion without undue deference to the assessment of the lower Court. I would however note that for the purposes of this particular appeal it does not matter which approach is taken.Submissions[33] Mr Connor appearing for the Falconers submitted that Judge Cunningham erred in a number of ways. He was particularly critical of her observations in relation to the first cause of action. He criticised the Judge's finding that Southern Cross has a sound argument that the mortgage expired on 25 March 1999. He submitted that what was intended by Southern Cross was irrelevant, and that themeaning of a letter of extension was that which a reasonable person of normal intelligence would have ascribed to it in the circumstances. In relation to the Judge's findings that the notice was not defective, he accepted that the Judge correctly stated the law, but submitted that Her Honour overlooked that the principal sum claim in the notice may have been overstated. In regard to the settlement reached in relation to the High Court proceedings, again he accepted that Judge Cunningham correctly stated the law, but then submitted that the Judge erred when she found that there was accord and satisfaction. He submitted that there was insufficient evidence available to the Judge to find that there was indeed a settlement. He submitted that all that occurred was that the Falconers gave an undertaking in the earlier proceeding not to interfere with the mortgagee sale if refinancing was not successful. He submitted there was a serious question to be tried in relation to the first cause of action. [34] In relation to the Judge's findings in the second and third causes of action, he submitted that it was inappropriate for the Judge to comment on the same, and that in any event her criticisms were misplaced. He submitted that the core question was whether or not Southern Cross discharged its duties under s 103A of the now repealed Property Law Act 1952, by delegating the sales role entirely to its agents, Barfoot and Thompson. He questioned whether or not Barfoot and Thompson correctly conducted the sale on this occasion. [35] He then dealt with the abuse of process arguments. Again he accepted that the Judge correctly stated and identified the law, but argued that her decision did not properly apply the principles to the cases before her. He submitted that Her Honour wrongly considered the three periods of delay in a global fashion, and that the decision did not separately examine pre-issue delay and post-issue delay. He submitted that pre-issue delay needs to be treated differently from post-issue delay, and that pre-issue delay in itself cannot form the basis of an application to dismiss for want of prosecution. He further submitted that a party seeking to strike out a claim for want of prosecution must show that it has suffered prejudice as a result of post-issue delay. He went through each of the areas of alleged prejudice, and submitted that they could not be placed at the appellants' door, and that they were not the result of post-filing delays. He also submitted that any delays by the Falconers were excusable, because they were caused by their lack of funds[36] Mr Kohler appearing on behalf of Southern Cross submitted that the Judge did not strike out the statement of claim simply on the basis that it did not disclose reasonable causes of action. Rather he submitted that the Judge exercised her discretion pursuant to rr 481 and 482 of the District Courts Rules. He submitted that the Judge correctly reviewed the totality of the case in exercising that discretion, and this Court should not intervene unless it can be shown that the Judge erred in principle in some way. He referred to the relevant facts which were before the Judge. He referred to the notice, and noted that, as at 4 November 1999, arrears of interest were clearly outstanding. He submitted that Southern Cross was entitled to call up the mortgage principal to remedy this default regardless of any confusion regarding the mortgage extension date. He noted that the Falconers were given the opportunity to refinance by agreement but were unable to do so. He pointed out that the Falconers expressly challenged the validity of the notice in the proceedings issued in the High Court, and that those proceedings were founded on the same alleged errors as are raised in the first cause of action. He submitted that the proceedings were settled, and that the settlement was implemented at the time. [37] Further, he submitted that the Falconers then deliberately delayed bringing their claim until the six year limitation period had all but expired. He then noted that the Falconers deliberately delayed service of the proceedings for a further 11½ months, and submitted that this was a breach of r 133 of the District Courts Rules. He noted that a backup fixture was offered to the Falconers on 17 December 2007, but that they declined to accept the same. They then requested the allocation of a firm fixture. A firm fixture was allocated for 31 March 2008, but the Falconers forced an abandonment of that fixture by failing/refusing to serve their briefs of evidence. He submitted that both the Court and Southern Cross had been presented with a fait accompli. He noted that by the time the application was considered by Judge Cunningham, 15 years had passed since the mortgage advance was made, and 8 years had passed since the mortgagee sale. He also referred to the evidence before the Judge that there was prejudice to Southern Cross. [38] Mr Kohler accepted that pre-issue delay in itself cannot form the basis for an application to dismiss for want of prosecution under r 482, and further that it will not justify dismissal pursuant to r 481. He submitted that the Judge did not find to thecontrary. He submitted that the Judge was entitled to find that there was prejudice to Southern Cross, and that that finding was not only understandable, but was inevitable. It was his argument that it was the Falconers' behaviour and delay that caused the present situation, and that it cannot be excused.Analysis[39] I start by observing that Southern Cross's application sought that the Falconers' proceedings should be stayed, dismissed, or set aside. The application relied on rr 481 and 482 of the District Courts Rules. [40] Rule 481 is concerned with the stay or dismissal of proceedings. It provides as follows:Where in any proceeding it appears to the Court that in relation to the proceeding generally or in relation to any claim for relief in the proceeding— (a) No reasonable cause of action is disclosed; or (b) The proceeding is frivolous or vexatious; or (c) The proceeding is an abuse of the process of the Court,— the Court may order that the proceeding be stayed or dismissed generally or in relation to any claim for relief in the proceeding.[41] Rule 482 deals with the situation where a plaintiff fails to prosecute his or her proceeding in a timely fashion. The rule reads as follows:Where the plaintiff fails to prosecute his or her proceeding or any part thereof, or the defendant fails to prosecute his or her counterclaim or any part thereof, to hearing and judgment, any opposite party may apply to have the proceeding or counterclaim, or such part thereof as aforesaid, dismissed, and the Court may, on such application, make such order as may be just.[42] The Judge did not make it clear which rule she was relying on when she struck out the statement of claim. She cited both rules, and she considered matters which were relevant to both. Her conclusion is contained in [73] of her judgment. She there noted that when she considered the pre-issue delay, the delay in serving the proceedings, and the events that caused the fixture of 31 March 2008 to beabandoned, that there had been both inordinate delay and serious prejudice to Southern Cross. Considered against the background of the causes of action which in her view were marginal, she exercised her discretion to strike out the statement of claim. [43] The Judge did expressly consider whether or not the Falconers' statement of claim disclosed any reasonable causes of action. She considered each of the three causes of action. She concluded there was no reasonable cause of action in relation to the matters raised in first cause of action, and that the second and third causes of action, were unlikely to succeed, but that it was not impossible that they might do so. The Judge did not however strike out the first cause of action. She could have done so under r 481. Nor did she strike out the statement of claim on the basis that it did not disclose any reasonable causes of action. Rather she went onto consider whether there was an abuse of process. Accordingly, it seems to me that there is little point in analysing whether the Judge was right or wrong in her comments, in particular on the first cause of action. [44] To the extent that it may assist, I record that in my judgment, the Judge's observations were correct. At the time the notice was issued, the Falconers were in default under the mortgage. They had not paid instalments due and owing by them. Whether or not the letter extended the mortgage to March 1999, or to March 2000, seems to be of little or no moment. Further, the Falconers has expressly challenged the validity of the notice in the proceedings issued in 2000 in the High Court. Those proceedings were founded on the same alleged errors that are now raised in the District Court proceedings. The High Court proceedings were settled, and the settlement was implemented. I agree with the Judge that there was accord and satisfaction of the issues arising out of the notice, and in my view it would be an abuse of process if the Falconers were now to be allowed to re-litigate the issues they settled in 2000. [45] I now turn to the operative part of the Judge's decision – namely whether the proceedings were an abuse of the process of the Court.[46] The Judge's use of the expression of abuse of process in her judgment must be a reference to r 481(c). Her discussion focuses in large part upon the Falconers' failure to prosecute the proceedings promptly. That could be a reference to r 482. It could equally be a reference to r 481. Keeping stale claims alive and not prosecuting them can be an abuse of process in terms of r 481(c) – See Grovit v Doctor [1997] 2 All ER 417 and Barbery Holdings Ltd v Bank of New Zealand HC WN CP257/92, 12 August 1999, Master Thompson. [47] The general principles applicable where it is asserted that there has been inordinate delay were carefully considered and summarised by Eichelbaum CJ inLovie v Medical Assurance Society New Zealand Ltd [1992] 2 NZLR 244. The Judge summarised the principles relevant to an application to dismiss an action for want of prosecution as follows (at [253]): a) By itself delay prior to the issue of proceedings cannot constitute inordinate and inexcusable delay for the purposes of a striking out application. b) If such delay has occurred, further delay after issue of proceedings will be looked at more critically by the Court, and will be regarded more readily as inordinate and inexcusable than if the proceeding had been commenced earlier. c) The defendant must show prejudice caused by the post-issue delay. If, however, the defendant has suffered prejudice as a result of pre- issue delay, he will need to show only something more than minimal additional prejudice to justify striking out the proceeding; d) An overriding consideration is whether justice can be done despite the delay. As to that, all factors, including pre-issue prejudice and delay have to be taken into account. [48] Delay of itself will not suffice to amount to an abuse of process. Further, if delay does not justify striking out under r 482, then it cannot amount to an abuse ofprocess under r 481(c) – see Commerce Commission v Giltrap City Limited (1997) 11 PRNZ 573. [49] I have applied these principles in considering the appeal. [50] There was substantial pre-issue delay in this case. The District Court proceedings were filed one day short before the expiry of the statutory six year limitation period from the date that the notice was issued. Mr Falconer, in an affidavit filed in the proceedings, endeavoured to explain this pre-issue delay. He says that he and his wife were concerned about the mortgagee sale of their property by Southern Cross, but that they were simply not in a position financially to pursue Southern Cross during the period following the sale. He explains that he and his wife were involved in a commercial property investment which proved to be disastrous for them, and that that investment was the subject of proceedings which culminated in a judgment of Morris J given in October 1997. I note that the date of the Morris J's judgment is just over eight years prior to the date on the District Court proceedings were issued. There is no further or more detailed explanation by Mr Falconer. [51] I accept that pre-issue delay of itself cannot constitute inordinate and inexcusable delay. It does, however, set the scene, and it is patently clear that there has been significant post- issue delay in this case as well. The Falconers did not serve their proceedings until almost a year later. There is no real explanation for this failure. Mr Falconer simply repeats that he and his wife were not in a position financially to pursue the claim. I note, however, that the memorandum filed as part of the notice of proceeding records that the Falconers were not in receipt of legal aid for the purpose of the proceeding. Further, service would not have been an expensive step. [52] Rule 133 of the District Courts Rules requires prompt service. It reads as follows:(1) The statement of claim and notice of proceeding shall be served— (a) As soon as practicable after they are filed; or(b) Where directions as to service are sought, as soon as practicable after such directions have been given. (2) Unless service is effected within 12 months after the day on which the statement of claim and notice of proceeding are filed or within such further time as the Court may allow, the proceeding shall be deemed to have been discontinued by the plaintiff against any defendant or other person directed to be served who has not been served.[53] The rule is expressed in mandatory terms. While the proceedings were served within the 12 month cut off period, the consequences of the Falconers' failure to serve the statement of claim promptly, and in accordance with r 133(1) is exacerbated, because the proceedings were filed on the very last day of the limitation period. As is noted in Brookers Commentary on the District Court Rules, those who go close to the line set by the Limitation Act 1950, should act with despatch once the proceedings have been issued. Here, the Falconers did not act with despatch. Indeed they deliberately delayed service. [54] There has been further post-issue delay. Mr Falconer in his affidavit asserts and he and his wife have prosecuted the claim diligently since it was served. This assertion is incorrect. A joint memorandum was filed by the parties advising that the Falconers would file and serve their verified list of documents on or before Wednesday 9 May 2007. The Court made consent orders accordingly. The Falconers did not file their list of documents until 30 May 2007. The Falconers were to complete inspection on or before Wednesday 23 May 2007. They did not complete inspection until 20 June 2007. When Southern Cross sought a fixture, the Falconers sought that the setting down date should be deferred. They turned down a back up fixture. They then failed or refused to file their written briefs within the timetable set by the Court so that the scheduled fixture could take place. As a result, the Falconers effectively forced the Court to vacate the fixture. There was no other alternative which would have been fair to Southern Cross. The Falconers then sought to have the proceedings re-listed in three months time, so that the position could be reviewed. [55] In effect, the Falconers seem to be expecting that the litigation will be conducted at their convenience, and notwithstanding the difficulties that causes for the Court and for Southern Cross.[56] No credible excuse has been made out for the delay, and the inference must be that it is inexcusable – Allen v Sir Alfred McAlpine & Sons Ltd [1968] 2 QB 229. [57] I agree with Judge Cunningham that there has been inordinate and inexcusable delay by the Falconers. [58] A Court will not exercise its power to dismiss an action for want of prosecution, unless the inordinate and inexcusable delay on the part of the plaintiff will give rise to substantial risk that it is not possible to have a fair trial of the issues in the action, or as such as is likely to have caused serious prejudice to the defendants – Birkett v James [1978] AC 297 at 318. Even where delays are considerable and blameworthy, if justice can be done despite the delay, then the Courts ought not to invoke "the grim penalty" of striking out – Manaia House Partnership v Dobbs & Henwood Builders Limited HC WHA CP96/90, 5 March 1997, Barker J. [59] Judge Cunningham clearly recognised this in her decision. [60] Here the only causes of action with any prospect (albeit remote) of success, are the second and third causes of action. Both turn on what was done by individuals. The case will necessarily depend to a large extent on the memories of those individuals, and on their ability to refresh their memories by reference to their contemporary written records. [61] An affidavit has been filed on behalf of Southern Cross by a Mr Ockenden. He asserts that the fact that the transactions which have been challenged occurred so long ago, presents Southern Cross with very real difficulties. He notes that the Falconers are seeking to challenge actions taken by various individuals, most of whom are no longer employed by, or are not available to Southern Cross, and that at the very least, that their memories will be challenged. [62] The person who dealt with the matter at Southern Cross was a Mr Thompson. He left Southern Cross's employment some years ago. The real estate agent who dealt with the mortgagee sale – a Mr Sceats of Barfoot and Thompson, is no longeremployed by that firm. Mr Falconer responds that Mr Sceats "appears" to still be working as a real estate agent in Auckland. That may or may not be the case. Inevitable Mr Sceats will have difficulty recalling what he did or did not do on Southern Cross's behalf in attending to its instructions to complete the mortgagee sale. The mortgagee sale occurred over nine years ago. The position is exacerbated, because the Barfoot and Thompson records are no longer available. Mr Ockenden has exhibited a letter from Barfoot and Thompson dated 22 August 2007 (after the proceedings were issued and served) recording they cannot trace their file relating to the mortgagee sale auction, and that no further information is available other than a computer listing record showing that the property was sold on 10 May 2000 for $529,500. Neither of the solicitors who dealt with the matter from Southern Cross's perspective are still employed by Southern Cross's solicitors. Mr Falconer asserts that one of them was employed by another legal firm in Auckland – at least as at March 2008. That may or may not be the case but it does not really answer the prejudice to Southern Cross. [63] Judge Cunningham concluded that prejudice was inevitable. I agree with her. In my judgment, and in that of Judge Cunningham, it is impossible to now have a fair trial of the matters raised by the Falconers. In particular Southern Cross will not be able to prove or disprove the allegations against it by reference to the real estate agent's files. Necessarily its defence will have to depend on the memories of those involved – assuming they can be located. It is inevitable that the key witnesses will find it extremely difficult to recollect events owing to the expiration of time. If the appeal were to be allowed, and the matter remitted to the District Court for hearing, any hearing would be some time away. This would simply exacerbate Southern Cross's existing difficulties, and the prejudice which has already been caused to it. [64] There is an additional factor. Litigation in the District Court – as in the High Court – uses case management. It is in the interests not only of the Court, but also of litigants as a whole, that precious Court time is not wasted. The Falconers' failure to comply with the timetable orders put in place by the Court, and the result that they were able to force the Court to vacate the fixture, has an effect not just on Southern Cross, but also on other litigants who wish to have their cases heard. There is a prejudice to the due administration of justice. I refer to the comments of Lord WolfMR in Arbuthnot Latham Bank Ltd v Trafalgar Holdings Ltd [1998] 2 All ER 181. As the Court of Appeal noted in the Commerce Commission v Giltrap City Limited, case management is important, and indeed vital, for controlling crowded calendars and in promoting the expeditious despatch of Court business. I accept that case management principles should not be allowed to obscure or undermine the fundamental purpose of the judicial system, which is to deliver justice to all concerned. However, to my mind, the disregard shown by the Falconers for the Court processes is a relevant factor, and one which the Court is entitled to take into account. [65] In my judgment, Judge Cunningham did not err in any way when she exercised her discretion to strike out the statement of claim and dismiss the proceedings. The appeal is dismissed. Southern Cross is entitled to its costs on a 2B basis, together with its reasonable disbursements as fixed by the Registrar, and I so order. If there is a any dispute in fixing these costs or disbursements, the same should be referred to me. Wylie J